市場(chǎng)營(yíng)銷課件Masters Lec 4 Range Planning Assortment Strategies

1、Range Planning Assortment StrategiesCorinna BudnarowskaIntended Learning OutcomesAfter studying Range Assortment Planning you should be able to:Describe the circumstances that trigger buying decisions;Compare product features and attributes;Identify a range of assortment strategies and apply the app

2、ropriate strategy to an appropriate range;Discuss how to select and manage suppliersRange PlanningRange = offering consumer choice (Ghosh, 1990)Number of lines carried by retailer is determinedConsumer focus are retailers / manufacturers offering what customers want potential disparity? does assortm

3、ent shape consumer preferences? (Hart & Rafiq, 2006)Helps to determine required service levelsService levels are about meeting customer expectations “satisfaction is intimately linked to expectations (Diehl & Poynor, 2021)Provides link between supply & demand (Hart & Rafiq, 2006)Dynamic constantly n

4、eeds to evolve, grow & changeDetermines store image (Hart & rafiq, 2006)Defining Assortment PlanningThe buying dept needs to establish a merchandise budget firstOnce this is defined - need to establish a Range Structure Plan (the planned buy) in order to have a framework in place to finalise the Ran

5、ge Plan (the actual buy)Range Structure Plan considerations:Range profile (price, style, appeal)Range width/depth (consumer choice, adequate promotional stock)Average selling price (market positioning)Margin mix (profit, risk)Sales density (space performance)1FormulateMerchandisePlan2DeterminePurcha

6、seBudget3PlanMerchandiseRange4ProductSelection5DeterminePricing strategy and price points (zones)6NegotiateCost pricesand Terms7DetermineDistributionStrategy8Allocate space9VisualMerchandising10MaintainRange11EvaluatePerformanceConsumerThe Buying CycleRe-examining The Buying Cycle to establish how a

7、ssortment/range planning takes placeThe Buying Cycle (Elliott & Rider, 2003)The Interrelationship between Marketing, Buying & Financial ManagementNB we have to meet the overall business needs (marketing and financial goals)An example Gantt Chart to illustrate the complexity and timescales of product

8、 planning(Elliott & Rider, 2003)Range Planning - timescalesTime = crucial element of buying cycle / range planPlanning not just about choosing products & negotiating budgets need to consider: timescales potential problems / hold ups complexities of process efficiency of cycle all parties involved in

9、 cycleThe Planning Process for a Range Structure Plan (a series of inputs and outputs)(Elliott & Rider, 2003)The Product MixAssortment / range - made up of products that have different prices, roles, features and attributes Effective buyers:Learn to select the right products Manage the assortment to

10、 maximise profitabilityThe product mix = the full range / mixture of products a retailer offers to consumers - represents appropriate combinations to meet specific needs of target market Appropriate combinations consist of:Product lines (merchandise grouping of related products)Product itemsThe Hier

11、archy of Merchandise Groupings - provides buyers framework or shopping listMerchandise Group - e.g. furniture, appliances, house-waresMerchandise category - e.g. dining furniture, washing machines, household textilesMerchandise Class - e.g. dining tables, washer/dryers, bed linenRange building is co

12、mplex - classifications form the framework of the Buying PlanA hierarchy of assortment decisions (Hart & Rafiq, 2006)Product linesSKUDepth(no. of variants, e.g. brands, styles, etc)breadthCategory assortmentCategoriesDepartmentsStoreAssortmentwidthMACROLEVELMICROLEVELModel Stock PlanningMerchandise

13、classification - provides buyer with a model stock planMerchandise groups, categories or class groupings - referred to as control unitsCategory management is a retail buzz word also associated with merchandise scrambling (Hart & Rafiq, 2006)Merchandise assortments can be categorised in many ways:E.g

14、. brand, style, product use, price, lifestyle, etc.Leading retail associations - established classifications for standard merchandiseModel stock planning determines how much stock to buyProduct selection criteriaWe have established that consumers have a set of rules when they go out shoppingThe rigi

15、dity of these rules is dependent on the nature and cost of the product they are planning to buyThere are many factors that effect product selection by the consumer, and so in turn determine the buyers criteria for product selectionWhat are they?Factors Affecting Assortment Buying DecisionsAssortment

16、QuantityQualityPriceTimeChoice of SuppliersBranded versus own brandWhere does the consumer fit into your buying decision?ProductRoleProduct complexityChoice of PolicyAccording to Wingate & Friedlander (1978), the determinants for policy choice are:The nature of merchandise lines carriedCharacteristi

17、cs of the trading areaCommunity needCompetitionPersonal capabilities of the merchantCapital resourcesProduct Mix StrategiesWidth/Depth Strategies dependant on the type of retail businessProduct Mix StrategiesWidth - That characteristic of assortment that refers to the number of different (though pos

18、sibly related) lines of merchandise carried by a retailer (defined by the number of options) Level of variety offered (Hart & Rafiq, 2006)Depth - That characteristic of assortment that refers to the number of varieties of merchandise within a given category (defined by the units per option) Level of

19、 specialism offered (hart & Rafiq, 2006)NB Hart & Rafiq (2006) also discuss breadth the choice offered within each category (cited Ghosh, 1990)Product Mix StrategiesNarrow variety/Shallow assortmentConvenience philosophyMost limited strategyLow inventory, high stock turnLow risk, simple operationCan

20、 lead to low margins E.g.vending machine, kioskWide variety/Shallow assortmentCovers many product categories but with few products per categoryEmphasis on convenience not price (less margin pressure)Limited customer loyalty but easy product substitutionPoor image and scrambled merchandise is a riskE

21、.g.Convenience storeProduct Mix StrategiesNarrow variety/Deep assortmentSpeciality philosophyHigh customer loyalty and repeat purchaseLow level of out of stocksGood buying powerRisk of too many eggs in one basketWide variety/Deep assortmentOne-stop shopping philosophyElement of convenience but with

22、more depthHigh customer traffic, loyalty and repeat purchasesAdvantage of good margin mix and spread of riskHigh stock investment and low stock turnRisk of competition from niche playersWhat precipitates a buying decision? McGoldrick (2002) identified 5 circumstances that may precipitate a buying de

23、cision:New or different products/brands are offered to the buying unitA need is perceived to produce new product linesA need is perceived to widen the choice of brands availableA lack of satisfaction is noted with existing products/brandsA routine review is undertaken of all or part of the existing

24、assortmentThe B&Q Range Review ProcessSCOPINGScope range review Agree critical path Conduct store survey Review footage options Agree merchandising principles Conduct sales trial Analyse sales trialPLANNINGDefine range Create range planning spreadsheet Agree range and sales forecasts Lay-up merchand

25、ising layouts Agree stock exit plan Agree merchandising layouts Order equipment and POS Agree review at range review meetingIMPLEMENTATIONAgree range review implementation dates Prepare plannograms Conduct test implementation Analyse test implementation Order product, allocate to stores Brief mercha

26、ndising agency Send range review pack to stores Monitor implementation Conduct post implementation review Take a close look at your products to identify good/bad performance - this will assist in determining products to keep or drop - product categories carry space limitations - in order to introduc

27、e new products, under performing products are lostStarQuestion MarkCash CowDogThe Boston Consultancy Group Approach - the BCG Matrix (1973)Relative Market ShareHighLowMarket growth rateHighLowHow Much Stock to BuyEssential to achieve balance between basic (staple products) and seasonal stock (in-sea

28、son hot items)We have discussed the need to achieve this mix to provide excitement to ranges and a good margin mix (safe (limits sales growth) vs. risky (leads to higher markdowns)Open to buy - used for in-season purchasing (result of whats left after pre-ordering stock commitments are made)Basic st

29、ock list planning - used for staple products that are pre-orderedProduct lines are deleted where demand decreases and re-ordered where demand remains constant/risesBuying framework must encompass an understanding of both sales history and emerging trends Basic Stock ManagementManagement of staple st

30、ock - dependent on efficient re-ordering systems (stock is replenished when needed but excess stock is not financed).The following questions need to be addressed:Will reordering be triggered by a reorder point or time intervals?Who will be responsible for counting stock (if not EPOS) i.e. store pers

31、onnel or suppliers representatives Frequency of stock countingThe order up to or economic order quantities will need to be establishedWill undelivered items remain on order or be cancelled and re-orderedHow often should the reorder point or the order up to quantities be checked and analysed to ensur

32、e that slow moving options are not re-ordered and fast sellers are not out of stockSummaryRange Planning is the result of establishing the merchandise budgetIt is essential to provisionally establish the Range Structure Plan to determine the actual Range PlanThere are a number of different strategie

33、s and considerations for a buyer in determining the assortment strategyThe strategy must be appropriate for the nature of the retailer and product categoryThe result of the range plan must match the findings of the merchandise budget and the criteria of the Companys current mission (NB - the buying

34、process requires financial, marketing and buying decisions to be cohesive)Recommended ReadingDiehl, K. Poynor, C. 2021. Great expectations?! Assortment size, expectations and satisfaction. Journal of Marketing Research. 47(2). 312-322.Hart, C. Rafiq, M. 2006. The Dimensions of Assortment: A Proposed Hier